Even though he started his educational journey as a physicist, Jon Miller has become one of the biggest heroes of internet marketing automation and helping businesses create and employ sophisticated marketing campaigns that match today’s customer expectations.

He co-founded Marketo, one of the industry leaders in marketing automation software, and there’s a lot to learn from what he has to say about small businesses moving to marketing automation software and creating effective marketing funnels.

Why Veering Away From a Doctoral Program in Physics at MIT Was the Best Step of Jon’s Career

Even though he earned is undergrad degree in physics and was all set to go to MIT for a top-of-the-line doctoral program, Jon veered off into internet marketing and never looked back. In fact, he’s spent his entire career in marketing and hasn’t ever regretted not pursuing his doctorate.

But he does give some credit to his background in physics: He thinks the quantitative and analytical way of thinking he learned during his undergrad years has helped him become the marketer he is today.

In 2006, when Marketo was trying to raise venture capital, marketing technology had a bad reputation, and the venture capitalists themselves had seen a lot of non-SaaS marketing technology that didn’t provide a very good return.

But they caught their break when they met Bruce Cleveland from Inter West. He had just stepped away from his position of CMO at Siebel, so talking to him felt more like talking to a marketer than a VC. He understood their product and saw the value an investment in them could provide, so he wrote them a check.

Marketing’s Fundamental Shift & How Marketo Fills the Gaps

According to Jon, marketing has changed more in the last 5-10 years than it ever did in the 100 years before that.

Before the internet became so pervasive, it was relatively easy for companies to reach their buyers, but kind of hard for buyers to find product information.

Today, that’s completely flipped around. The internet has brought a very profound change in the way companies need to reach out to and interact with their customers, which is where Marketo comes in: it’s a software service that provides the technology marketers need to thrive and succeed in this new way of buying.

But… How is Marketo Different from HubSpot?

According to Jon, HubSpot is a company that serves the needs of very small businesses, which is further proven by their recent CRM launch.

While there is a need for a mile-wide, inch-deep solution, Jon says that as companies reach higher levels of sophistication in their marketing, they need more functionality, which is where Marketo comes in. Even though Marketo isn’t a solution that tries to be everything for everyone, it is a marketing-first solution that helps marketers successfully do modernized demand generation.

Practicing What They Preach (Or Drinking Their Own Champagne) from the Get Go

Marketo has grown into a company with more than 3,500 clients by practicing what they preach.

Even though a lot of SaaS companies rely on their own networks to generate their first handful of leads, the Marketo founders took a different route – the route of online marketing & demand generation.

Before they even had a product to launch, Jon started blogging to generate an audience who wanted to hear what he had to say, and then scaled from there.

But there was a problem: by pumping out piece after piece of thought leadership and best practices, Jon got an incredible inbound flow of people, but they weren’t actually ready to buy – they were coming in for his content, not his product.

To solve the problem, they used their own solution (Marketo) to help nurture their incoming leads and develop them over time.

Marketo’s Lead to Customer Cycle & the Lag of Picking up Marketing Automation

On average, it takes Marketo 327 days to convert someone from a lead into a customer. Some leads are way faster, and some have been sitting around in their system for years.

But leads from inbound marketing content funnels are far faster: taking an average of just 170 days to convert.

It might seem like people are kind of slow to pick up on marketing automation, but that’s not the way Jon sees it.

He points out that it took 20 years for CRM services to get the market penetration they have today. So, in the case of marketing automation, it’s moving from something that was only being purchased by early adopters into something that is becoming more mainstream.

When to Move to Marketing Automation: Know Your Numbers & Be Ready to Work

Jon says that the time to move from manual marketing to marketing automation depends on the number of customers and prospects you’re trying to process. 100 to 200 can be done manually, but when you get into the thousands, that’ll be too much to handle.

He also says that you need to be willing to use the automation software, because despite the word “automation,” it doesn’t actually run by itself. You’ve got to be willing to tell it the marketing that you want it to do, which is why you’d probably need to have at least one person on your staff who is 100% dedicated to marketing before you’re ready to invest in automation technology.

How Marketo Sets Up an Effective Inbound Content Marketing Funnel

Jon says Marketo doesn’t really do anything unique or out of the box for user acquisition, but he does say that they’re really good at running their own software to create a really wide top part of their funnel, nurture the new leads, and identify when someone is ready to be passed along to sales.

In fact, the leads & sales that come from their inbound content marketing funnel account for 58% of their business.

To get such a high success rate, they apply a lot of rigor to each of the three stages of their funnel:

Tofu – Top of the funnel

Because no one likes bland tofu (pun intended), Marketo runs highly interesting campaigns to generate awareness and get new names into the top of their funnel.

Mofu – Middle of the funnel

At this stage, they use the Marketo software to help them properly nurture raw names into sales-ready leads.

The key point they focus on here is the fact that when someone first responds to a campaign and puts their name in the top of the funnel, it has very little to do with them being a qualified lead that’s ready for sales… a lot of work has to be done here, and it may mean recognizing that there isn’t a good fit.

Bofu – Bottom of the funnel

This is where their sales team is engaged by directly contacting their leads and closing deals.

Creating the Interesting, Engaging Content to Fill the Top of the Funnel

Marketo’s most popular pieces of content aren’t their blog posts – it’s their definitive guide series.

They set aside the time & mental energy to create 100-page ebooks that are extremely educational, highly visual, and easy to read. They give them away for free, but don’t treat them as Marketo commercials.

For example, Jon’s guide on marketing automation tells readers everything they need to know about buying marketing automation software. It’s had over 200,000 views, but only has one paragraph in it about Marketo.

Jon finds the guides to be so effective and valuable, that he says he’d rather create one 100-page definitive guide than seven ebooks.

The Marketo Institute

One thing Jon’s wanted to do from the very beginning was to provide a way to educate and empower marketers.

He feels most marketing programs don’t train their students to do modern, engaging marketing, leaving them to flail around guessing at things. With the Marketo Institute, he can empower marketers with fact-based insights and quantitative research to tell them what strategies actually work and why. Because Marketo has the unique opportunity to access anonymous marketing data of their 3,500 client companies in 20 industries and 36 countries, the teachings of the institute are based on the best data set of its kind.

Reverse Logic: How Making Marketo More Expensive Improved Their Sales

Imagine opening Excel for the first time ever. People have told you how amazing and powerful of a tool it is. You click around, try to enter some data, but can’t figure it out for the life of you. You soon get frustrated and write it off as too difficult to be worth anything, not realizing what you’re missing out on.

Now imagine if you’d had to pay a hefty upfront fee to get access to Excel & couldn’t figure it out. Because you’d invested the money, you’d be on the phone to customer service to figure out how to get that thing working, right?

With Marketo’s first product – they had to figure out this same thing. In 2007, when they launched their PPC bid management solution, they found the biggest problem with selling was that a lot of people simply didn’t know what to do with the technology to make it effective.

To solve the problem, they figured out that putting some barriers in the way to the product could actually work in their favor… it was too easy for their prospects to write off their product during a free trial, but after they’d invested a three-month payment up front, they’d force themselves to work through it and get it working at optimum efficiency.

Jon’s Best Productivity Hack

Rather than becoming obsessed over time management, Jon thinks a more effective take at increasing productivity is managing his energy. One hour of being really alert and focused is far better than four hours of sluggish work, he says.

He also says this is key for managers to understand – all too often people try to micro-manage the time of their employees, rather than their energy.

One Must-Read Book

Jon suggests reading The Hard Thing About Hard Things by Ben Horowitz because it’s the closest thing he’s ever seen to a step-by-step instruction manual for a startup CEO.

Disclaimer: As with any digital marketing campaign, your individual results may vary.

Jon Miller
Marketo Content

Eric Siu (@ericosiu) is the CEO at Single Grain, a digital marketing agency that focuses on paid advertising and content marketing. He contributes regularly to Entrepreneur Magazine, Fast Company, Forbes and more.